Google Shares Tumble Following Disappointing Earnings

Remember how Google always seems to handily beat analysts’ estimates? No such luck this time around.

Google shares are getting crushed after hours following the company’s fourth-quarter report. Quarterly EPS of $9.50 came in well short of the $10.49 that analysts were expecting, according to Thomson Reuters.

The stock is down 9.2% to $580.37 in after-hours trading.

Part of Google’s troubles were related to advertising revenue. The average cost that advertisers paid Google per click fell 8% from a year ago as well as 8% from one quarter earlier. This is a metric that had been steadily rising in recent quarters.

Total costs also jumped 30%, which hurt results.

On the bright side, Google’s social network, Google+, now has 90 million users, compared to the 40 million figure that was released in October. But Google has a long way to go before reaching Facebook status in this department.

And on the hiring front, Google said it added more than 8,000 new employees last year, including more than 1,000 in the fourth quarter alone. This brings its total to nearly 32,500 employees.

As our markets guru Paul Vigna just said in an email, Google’s wide earnings miss will certainly raise even more questions about this lackluster earnings season.

Comments (5 of 20)

The google+ user numbers are complete BS- I'm sure I'm counted as a user even tho because I use gmail they contact keep telling and has a banner on top where if I click it takes me to my google plus page - I don't even recall signing up for google plus!
S basically they are making every gmail user a plus user. I'd like to see how many interactions happen per day vs fb .

4:49 pm February 11, 2012

BPS wrote :

Google was cool before they went public. Now they are like all the rest of them. Making the internet suck hard enough to chop up and rent out to who can afford it. .. . google sucks android

6:41 pm January 19, 2012

Kyle wrote :

35,5000 employees?

6:12 pm January 19, 2012

loranzo wrote :

Hi siri, goodbye foogle!

5:30 pm January 19, 2012

StopTheManipulation wrote :

@John Wall Street Journal is not responsible for a 10% drop in share price, investors are. There is no way to sugar coat an 8% drop in click fees. That said, I can almost guarantee that the hedge funds were behind the ridiculous run up to earnings and will now benefit on the short side of the trade.

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